TSMC 3q25 Strong Beat And Raise

3Q25 Results: Beat Across the Board

• Revenue: NT$989.9bn (+6.0% QoQ, +30.3% YoY), 2.3% above consensus of NT$967.7bn.

• Gross Margin: 59.5% (+0.9ppt QoQ, +1.7ppt YoY), beating sell-side/buy-side consensus of 57.3%/59.0%. Both revenue and GM exceeded the high end of company guidance.

• EPS: NT$17.44, 10.4% ahead of the consensus estimate of NT$15.8.

• Commentary: The GM beat was driven by a more favorable FX rate (29.91 actual vs. 29.00 company assumption), cost improvements, and higher UTR. These factors were partially offset by margin dilution from overseas fabs.

• Revenue by Key Platform: HPC was flat QoQ (57% of total revenue), while Smartphone grew 19% QoQ (30% of total revenue).

4Q25 Outlook & 2025 CapEx

• 4Q25 Revenue Guidance: US$32.2-33.4bn, implying a 0.9% QoQ decline at the midpoint. Based on a forecasted exchange rate of 30.6, the NT$ revenue guidance is NT$985-1,022bn, up 1.4% QoQ increase at the midpoint. 4Q25 NT$ revenue guidance midpoint is 5% above consensus. The outlook is supported by continued strong demand for N3 and N5 process technologies and robust AI-related demand.

• 4Q25 Margin Guidance:

  • Gross Margin: 59.0-61.0% (60.0% midpoint), benefiting from favorable FX but still facing dilution from overseas fabs.

  • Operating Margin: 49.0-51.0%.

• 2025 CapEx: The forecast has been raised to US$40-42B from a prior US$38-42B. The allocation is ~70% for advanced process technology, 10-20% for specialty process, and 10-20% for advanced packaging, test, and mask.

Key Commentary